Suite 12, 188 – 196 Stratton Tce, Manly QLD 4179

07 3893 0966
Log in to Xero

Substantiation

Substantiation

Usually, a receipt is required showing the item purchased, the amount, the date and the name of the supplier are required to claim a tax deduction for a work-related expense. Private use may need to be apportioned. Many of the following expenses require a one-month diary or similar record.

Laundry

You can claim 50 cents per mixed load and $1 per full load of qualifying uniforms or protective clothing, up to $150 per year. Simply take your average loads per week and multiply it by the number of weeks you worked.

Less Than $300

If you claim less than $300 in work-related expenses such as self-education, tools, uniforms, protective items, stationery, union fees, etc you do not need to substantiate your claim with receipts. Any claim you make for motor vehicle expenses or travel costs (include tolls and parking) is not counted towards the $300 limit.

Less Than $10

If each individual expense is less than $10 and the total of all such expenses does not exceed $200 you do not need to keep a receipt but must have a diary entry showing the name of the supplier, date, amount and a description of the purchase. This also applies when you can’t get a receipt such as parking meters.

Allowances

Each year the ATO produces a list of what it considers reasonable travel allowances. If your employer pays you an allowance and you do not claim more than the amount listed by the ATO as reasonable you do not have to substantiate with receipts the amount you incurred. But you do have to have incurred the expense. A diary entry of your food expenses is sufficient. If you are away from home for more than 5 nights you will need to keep a travel diary of what you did each day. You can still claim up to the ATO reasonable amount even if your employer paid you less as long as it was a bona fide allowance (ie not just $5 per night but sufficient to live off).

The ATO also releases what it considers a reasonable overtime meal allowance each year. Again you can claim up to this amount even if your employer pays you less but you must be paid the allowance under an award.

Electricity

The ATO allows you 52 cents per hour for every hour you are working at home in an office separate from the rest of the family. This covers electricity and maintenance on the room. Keep the diary for 1 month. If you worked from home during the COVID-19 restrictions the ATO allows you to claim 80 cents per hour & no separate room required. This includes all running costs such as electricity, depreciation, cleaning, computer and phone costs, internet and any consumables.

Motor Vehicle

By keeping a diary for one month each year you can claim up to 5,000 kilometres per vehicle you own. If you own a car together with another person and it is only their name on the registration papers they can complete a declaration of joint ownership so you can claim it. You are also considered to be the owner of a car even if it is registered in the name of another family member but you are the one who pays all the expenses relating to it.

Telephone

To claim STD and mobile calls from your home phone go through one month’s itemised account and work out the numbers that are work-related. This percentage of work-related calls can be applied to the mobile and STD calls in the other months. Local calls can be apportioned by keeping a diary for one month noting the ratio of private to work-related local calls. Line rental can also be apportioned.

Mobile Phones

Analyse one month’s statement and apply its ratio of work to private calls to the rest of the year.
Commissioner’s Discretion – If you have sufficient evidence that you have incurred the expense and would have been entitled to a deduction if you had a receipt then the ATO must still allow you the deduction but it needs to be beyond doubt that you incurred the expense.

Work-related Travel

Wage-earners can claim their motor vehicle expenses when they meet the substantiation requirements and they travel as follows:

1) Bulky Equipment

Home to work travel is claimable if there is no safe storage at work and as a result, you transport bulky equipment between home and work. Safe storage is defined as similar to your own personal locker. Therefore a container on a building site to which all and sundry has a key is not safe storage. Case S29 prescribed more than 20kg was bulky. Taxpack gives the example of a ladder and drum kit not because they weigh more than 20kg but because they fulfill the difficulty to carry side of bulky.

2) Abnormal workplace, this is defined in Taxpack as:

From your normal workplace to an alternative workplace – for example, a client’s premises – while still on duty and back to your normal workplace or directly home. From your home to an alternative workplace for work purposes and then to your normal workplace or directly home.

This includes being sent to another branch or shop to relieve providing you were not employed
predominantly to relieve. It covers seminars and visits to customers. It also includes work-related tasks performed on the way home or to work but, note MT 2027, the task cannot be insignificant such as dropping off the mail. But if you have to travel out of your way to drop off the mail you can claim for this extra distance. For more refer TD 96/42 and TD 96/43.

3) Between Jobs – note this includes travel from home when home is the base of operations or work begins there.

Home can be considered a base of employment if employment-related duties have begun before leaving there, providing those employment-related duties did not begin merely for the convenience of the taxpayer.

4) Itinerant work

Your job involves travelling to more than one place of work before returning home.